The New South Wales State Government has been slammed by the State Auditor General’s Department for mishandling the negotiations of the V8 Supercars events held, and to be held, at the Sydney Olympic Park complex.

The event made its debut late last year with much fanfare and was well-attended and declared by many to be a commercial success for V8 Supercars Australia (V8SA) and the state coffers.

Closer investigation, however, has revealed that the opposite would be closer to the truth…

An investigation into the event by the state’s Auditor-General, Peter Achterstraat, has revealed that the event cost more than planned and provided fewer benefits than anticipated. Additionally, it found that the State Governments’s support for the event actually weakened its bargaining power with V8SA when it came to finalising the contract.

In turn, this allowed V8SA to leverage the conditions that it wanted from staging the event, so desperate was the State Government not to lose face if the deal collapsed.

Mr Achterstraat’s report has found that the costs to stage the event over its five-year contract were “$10 million more than planned”, (over 25% above the agreed budget) and that the benefits it will reap will be “nearly 25%” lower than expected.

Mr Achterstraat’s advice to the State Government was: “Negotiate first, announce second – not the other way around,” in reference to the State Government trumpeting the event some ten months before the contracts were signed.

“Initial advice to cabinet in June 2008 was based on limited analysis and consideration of options,” the report added.

Indeed, many voters protested against the decision to hold the event, arguing that the money would bet better invested in propping up other public services.

Negotiations for the event were handled by disgraced senior government minister Ian MacDonald (pictured below), who recently was sacked quit the government to keep his hefty parliamentary pension amid suggestions he had rorted expenses for a host of functions and international trips.

The other figure in the negotiations was then-Premier Nathan Rees, who was dumped by his own party just months after the event was signed off.

(As a side note, the State Government consistently lumbers from one disaster and blunder to another, and this damning report will almost certainly be one of the many nails in the coffin to see the Labor Party dumped from office at the next election in March 2011. Mind you, the Opposition is barely any better…!)

In calling for the Government to provide more “consistent and accurate costing” of future major events, the report also noted: “A good day out is not the same as a good deal.

“[New South Wales] needs major events to help attract tourism and investment. Negotiation and subsequent management of those events needs to be done with the benefit of the NSW taxpayer in mind.”

“A clear direction and an agreed set of guidelines must be developed for major events in NSW,” it concluded.